REG - Intercede Group PLC - Half-year Report
RNS Number : 4268UIntercede Group PLC25 November 2019
25 November 2019
INTERCEDE GROUP plc
('Intercede', the 'Company' or the 'Group')
Interim Results for the Six Months Ended 30 September 2019
Intercede, the leading specialist in digital identity, credential management and secure mobility, today announces its interim results for the six months ended 30 September 2019.
The financial information in the following pages reflects the impact of IFRS 16 Leases. IFRS 16 has been applied retrospectively and the impact on each line of the Consolidated Financial Statements is explained in Notes 1 and 6.
Financial Highlights
· Revenues increased by 5% to £4.4m (2018: £4.2m) reflecting a strong end to the half with orders received from both new and existing customers.
· Operating expenses reduced by 9% to £4.3m (2018: £4.8m), which reflects staff cost savings and continued tight control of overheads.
· A return to operating profit of £25,000 (2018: £609,000 operating loss), the first time this has been achieved since the corresponding period six years ago.
· A profit for the period of £0.2m (2018: profit of £0.1m) resulted in a basic profit per share of 0.4p and a fully diluted profit per share of 0.3p (2018: basic and fully diluted profit per share of 0.2p).
· Cash balances of £5.2m at 30 September 2019 have increased by £1.5m over the last 12 months, primarily driven by positive cash generation from operations.
Operating Highlights
· The sales team has been strengthened, including the hiring of a new partner manager who is tasked with enhancing our partner program. The establishment and further development of partner relationships is critical for the Group's future growth prospects.
· Launch of the Innovation Hub, an internal team tasked with guiding the future architecture and functionality of Intercede products and improving how we develop and deliver software and services.
· Release of MyID Professional; a simplified version of MyID targeting the large addressable market of mid-market enterprises to enable them to step up to the strongest form of user authentication with least cost and risk.
Chuck Pol, Chairman, said:
"The results we are announcing today do not represent the full story of the progress that has been made to refocus the Group's strategy towards sustainable revenue growth and profitability.
The return to a first half operating profit, the first time this has been achieved for six years, is an important milestone. The laser focus on our new strategy is evident, particularly in the growth of our cash balances and our dedication to writing the best code in the industry. The release of MyID Professional represents a more scalable version of MyID that gives our customers and partners the strongest form of user authentication in a simplified lower cost format.
There remains further work to be done, but the direction of travel and momentum in the business reflects the considerable achievements of the Intercede Team to date - we remain on track."
ENQUIRIES
Intercede Group plc Tel. +44 (0)1455 558 111
Klaas van der Leest, Chief Executive
Andrew Walker, Finance Director
finnCap Tel. +44 (0)20 7220 0500
Stuart Andrews, Corporate Finance
Simon Hicks, Corporate Finance
About Intercede
Intercede is a UK-headquartered, AIM listed (LSE:IGP) cybersecurity company with a US office in Reston, VA.
Founded more than 20 years ago, Intercede has continued to innovate its software platform. Today, MyID® credential management software helps governments and enterprises around the world issue and lifecycle manage millions of citizen and workforce digital identities. Interoperable identity management software facilitates strong multi-factor authentication across mobile devices, smart cards, USB tokens and virtual smart cards.
It is our vision to safeguard the integrity of connected workforces, supply-chains, citizens and industrial technologies for the world's businesses and governments that will not compromise on cybersecurity.
For more information visit: www.intercede.com
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
INTERCEDE GROUP plc
('Intercede', 'the Company' or 'the Group')
Interim Results for the Six Months Ended 30 September 2019
Interim Management Review
Introduction
As noted in the Annual Report for the year ended 31 March 2019, action has been taken by the new management team to refocus the Group's strategy towards sustainable revenue growth and profitability. Evidence of this turnaround has been visible inside the business for some time and is now increasingly evident in the financial performance. Revenues for the six months ended 30 September 2019 are 5% higher when compared to the same period last year. There has been a 9% fall in operating expenses versus the same period last year and it is pleasing to note that cash balances have increased from £3.6m to £5.2m over the past year. The return to a first half operating profit, the first time this has been achieved in six years, is an important milestone and validates the new strategy and its execution.
Strategy
In the 2019 Annual Report we also talked about an outlook that focuses on organic growth through the execution of a strategy centred around colleagues, customers, channels and cash. Actually, this 4C strategy is missing a fifth 'C', which is 'code'. Intercede takes great pride in having colleagues who are able to write the best code in the industry to satisfy some of the most demanding customers in the world, including industry majors as well as governments, the military and banks.
1. Colleagues
Staff motivation remains a priority and an Employee Working Group has been established to follow up on regular periodic employee surveys and turn suggestions for improvement into actions. We continue to provide support to colleagues wherever it is needed to ensure a good work/life balance and to empower them to continue to deliver strong results. We appreciate and continue to be impressed by the considerable achievements of our colleagues.
Over the period, progress has been made in strengthening specific areas of the business, particularly the sales team with new additions in the UK and US offices. We are also pleased to welcome Rob Chandhok back to the Intercede Board as an independent Non-Executive Director. Rob served as a Non-Executive Director between April 2015 and January 2017 and brings more than 20 years of experience and expertise in software and embedded systems.
2. Customers
As outlined below in the Financial Results section, we have received some significant follow on orders from existing customers, which provides tangible evidence our secure credential management software continues to deliver measurable business value.
We have sold three new deployments to the US Navy, US Airforce and one of the largest US wireless network operators. All of these deals were for our traditional smartcard solution although it should also be noted that we are continuing to see orders, along with strong interest and bid activity, for Derived PIV solutions. Derived PIV is effectively mobile PIV and enables a cryptographic credential to be passed into the secure area of a mobile device, instead of a traditional smartcard. With Derived PIV, US Federal government and military personnel have the flexibility to use their mobile devices as an alternative factor of strong authentication in a NIST SP800-157 and FIPS 201-2 compliant manner.
3. Channels
The establishment and further development of partner relationships is critical for the Group's future growth prospects. MyID is a Credential Management System (CMS) that forms part of a wider identity ecosystem, so technology partnerships are crucial to ensure that MyID works with the devices and technology our customers want to use.
Intercede also utilises its global network of reseller partners to provide the global footprint to locally deliver the cyber security solutions our customers need. As part of the strengthening of the sales function we have hired a new partner manager who is tasked with enhancing our partner program. This will be designed to engage, enable and reward partners for their commitment to expanding our reach into targeted markets. It will include core product training, joint marketing support and the establishment of a partner portal (for online support) and a partner advisory board to better inform the MyID product roadmap.
Good progress has been made in the past six months working closely with technology as well as channel partners on new opportunity generation in our chosen markets.
4. Code
Innovation is in Intercede's DNA and recently we launched the Innovation Hub, an internal team tasked with two primary goals:
1. To guide the future architecture and functionality of Intercede products.
2. To improve how we develop and deliver software and services.
The prementioned US identification standards for Federal employees and contractors (NIST SP800-157 and FIPS 201-2) are set to evolve further with the forthcoming FIPS 201-3 update, which proposes the expansion of Derived PIV credentials onto a wider range of devices. FIPS 201 compliance has been of strategic importance to Intercede since it was created and the Innovation Hub team are looking at FIDO authentication, which is likely to be included as an option under FIPS 201-3. The FIDO Alliance is made up of hundreds of global technology leaders who are focused on providing open and free authentication standards to help reduce the world's reliance on passwords and SMS OTPs (one-time passwords).
The Innovation Hub is also looking at changing MyID's architecture to use REACT and REST to create a more intuitive web user interface and enhance our mobile capabilities. This is important for the future of large-scale mobile credential opportunities, such as national ID deployments, as one of the benefits REACT/REST will provide a faster more reliable credential issuance process at high volumes.
In order to address the requirements for channels as well as end users, MyID Professional has been developed and was recently launched in September 2019 further underlining Intercede's ability to innovate and deliver.
5. Cash
The Group's financial stability, control environment and management information have been significantly improved since action was taken to deliver sustainable revenue growth and profitability. This improved operational performance is reflected in the level of cash generated from operations totalling £1,841,000 (2018: £739,000). Cash continues to be king; not only in the sense that it is required to meet upcoming financial obligations but also because it is required for strategic investment in the other 4C's.
Financial Results
Revenue in the period totalled £4,364,000, a 5% increase compared to the corresponding period last year. This reflects a strong end to the half with second quarter total orders exceeding first quarter total orders by a ratio of almost 4:1. This trend of increasing orders over the period is promising and indeed some of the second quarter orders will generate revenue over the next 12 months. It is also pleasing to note the longer-term trend of Intercede's revenue. Revenue for the six months ended 30 September 2016 was £2,828,000 and the growth from this starting point represents compound average growth of 16% over the three corresponding periods to 30 September 2019.
Revenue highlights for the period include:
− Follow-on MyID license sales to an existing US Federal agency customer, totalling 75,000 devices, spread across two different deployments. One of these deployments will enable users to issue Derived PIV credentials to a mobile device using their original PIV card.
− The same US Federal agency customer has also ordered professional and development services in excess of $0.5m, to implement a 35,000 device deployment purchased in the corresponding period last year.
− An additional 35,000 licenses sold to a government in the Middle East operating an e-Government services portal.
− A follow-on MyID license sale for 20,000 devices to one of the world's largest Aerospace & Defence contractors.
− A new MyID license sale to provide a traditional smartcard deployment for one of the largest US wireless network operators.
− A new MyID license sale to a US Navy force providing surveillance systems.
− A new MyID deployment sale to an existing US Airforce customer for a forward deployment based in the Middle East.
All of these wins are expected to generate incremental revenue over the next 12 months from a combination of support & maintenance plus professional services, development and/or follow-on license sales.
Compared to the corresponding period last year, operating expenses have been reduced by 9% to £4,329,000 (2018: £4,768,000). This reflects staff cost savings and continued tight control over all areas of expenditure. Staff costs continue to represent the main area of expense, representing 87% of total operating costs (2018: 83%). Intercede had 82 employees and contractors as at 30 September 2019 (30 September 2018: 85). The average number of employees and contractors during the period was 82 (2018: 89). It should be noted that this 8% year on year reduction in employees and contractors reflects efficiency improvements in operational delivery and has not impacted upon Intercede's ability to deliver MyID solutions or to implement the 5C strategy.
A £447,000 taxation credit for the period (2018: £993,000 taxation credit) primarily reflects the 2019 Research & Development ("R&D") claim which results from the Group's strategic investment activities. The Group is a beneficiary of the UK Government's efforts to encourage innovation by allowing 130% of qualifying R&D expenditure to be offset against taxable profits and allowing 14.5% of the lower of R&D losses or taxable losses to be paid as tax credits. In recent years, the tax credit has been unrestricted due to taxable losses exceeding R&D losses, although this was not the case for the 2019 claim. Had the 2019 claim been unrestricted, the amount claimed would have been £717,000 which is a fairer reflection of the Group's continued level of strategic investment activities.
The increase in revenue combined with the reduction in operating expenses has resulted in a return to operating profit of £25,000 (2018: £609,000 operating loss), the first time this has been achieved since the corresponding period six years ago. A profit for the period of £184,000 (2018: £89,000) resulted in a basic profit per share of 0.4p and a fully diluted profit per share of 0.3p (2018: basic and fully diluted profit per share of 0.2p).
Cash balances as at 30 September 2019 totalled £5,156,000 which compares with £3,623,000 as at 31 March 2019 and £3,228,000 as at 30 September 2018. The increase in cash balances is primarily driven by £1,841,000 of cash generated from operations (2018: £739,000) and also reflects the benefit of £422,000 proceeds from the disposal of a UK office (2018: £nil). It is also worth noting that the 2019 R&D tax claim totalling £460,000 was received shortly after the period end and does not form part of the cash balances as at 30 September 2019 (2018: R&D claim totalling £993,000 received prior to period end and included in the 30 September cash balances).
The Group adopted IFRS 16 Leases with effect from 1 April 2019 using the full retrospective method. This has resulted in the Group recognising right of use assets and lease liabilities for all contracts that are, or contain, a lease. Instead of recognising an operating expense for its operating lease payments, the Group will instead depreciate its right of use assets and recognise interest on its lease liabilities. The impact on each line of the Consolidated Financial Statements is explained in Notes 1 and 6.
Operational Review
Intercede is trusted by governments and large enterprises throughout the world. Where protecting data really matters, you will find MyID. The security, reliability and interoperability of MyID software sets it apart and is why we are proud to help many leading organisations around the world manage the secure digital identities they issue to citizens and employees. In addition to offering MyID as a market-leading credential management commercial off-the-shelf product, Intercede supplies MyID as a platform providing service providers with a range of software and service tools enabling them to embed digital identity into their own solutions.
For over 20 years Intercede has delivered solutions that truly test the interoperability of MyID because governments and large enterprises typically have complicated PKI (public key infrastructure). But we recognise that there are enterprises who are happy to follow best practice and just want a simple, pre-configured solution that protects their networks, systems and cloud-based resources with the most secure method of authenticating employees. We are therefore pleased to announce the release of MyID Professional, an easy to use and deploy software solution that enables enterprises to replace insecure passwords with the strongest form of multi-factor user authentication.
MYID PROFESSIONAL INCLUDES:
· MyID Professional server software
· Connectors to Microsoft Active Directory and Microsoft Certificate Services
· Connectors with a wide range of leading smart cards and USB tokens
· Connectors with hardware security modules, used to secure keys and sensitive data
· Operator desktop for system administration and helpdesk operators
· End-user client for simple self-service operations
· Documentation covering installation, configuration and use
MYID PROFESSIONAL CAN BE USED TO:
· Secure Windows and network logon
· Secure VPN and remote access
· Protect cloud resources such as Microsoft Office 365
· Sign and encrypt emails, protecting against spear-phishing attacks
· Deploy PKI credentials for strong two-factor authentication to smart cards and USB keys
· Enable simple self-service credential management at the user's own desktop, thereby reducing help desk costs
The establishment and further development of a simplified version of MyID will be more scalable and is therefore important for the Group's future growth prospects. By combining predefined business processes and out-of-the-box integration with common infrastructure components, MyID Professional will enable smaller organisations to step up to the strongest form of user authentication with least cost and risk. MyID Professional is available on a subscription basis via Intercede channel partners.
MyID is now available in three product lines, thereby reflecting a growing product portfolio for an expanding addressable market ie:
1) MyID Enterprise;
2) MyID PIV; and
3) MyID Professional.
Outlook
The actions taken to refocus the Group's strategy continue to drive improvements throughout the business. As in previous years, revenue is expected to be weighted towards the second half of the year Whilst the nature of Intercede's business and customer profile is such that the precise timing of orders is difficult to predict, the current sales pipeline and levels of bid activity continue to support management's revenue and profitability targets.
By order of the Board
Klaas van der Leest Andrew Walker
Chief Executive Officer Finance Director
25 November 2019 25 November 2019
Consolidated Statement of Comprehensive Income
6 months ended
30 September 2019
6 months ended
30 September 2018
Year ended 31 March
2019
Restated
Restated
£'000
£'000
£'000
Continuing operations
Revenue
4,364
4,174
10,108
Cost of sales
(10)
(15)
(24)
__________
__________
__________
Gross profit
4,354
4,159
10,084
Operating expenses
(4,329)
(4,768)
(10,025)
__________
__________
__________
Operating profit/(loss)
25
(609)
59
Finance income
9
5
11
Finance costs
(297)
(300)
(600)
__________
__________
__________
Loss before tax
(263)
(904)
(530)
Taxation
447
993
979
__________
__________
__________
Profit for the period
184
89
449
__________
__________
__________
Total comprehensive income attributable to owners of the parent company
184
89
449
__________
__________
__________
Profit per share (pence)
- basic
0.4p
0.2p
0.9p
- diluted
0.3p
0.2p
0.8p
__________
__________
__________
The Consolidated Statements of Comprehensive Income for the periods ending 30 September 2018 and 31 March 2019 have been restated to reflect the impact of IFRS 16 Leases (see Notes 1 and 6).
Consolidated Balance Sheet
As at
30 September 2019
As at
30 September 2018
As at
31 March
2019
Restated
Restated
£'000
£'000
£'000
Non-current assets
Property, plant and equipment
151
207
154
Right of use assets
1,021
1,249
1,135
___________
___________
__________
1,172
1,456
1,289
___________
___________
__________
Current assets
Assets held for sale
-
373
373
Trade and other receivables
3,188
2,355
4,797
Cash and cash equivalents
5,156
3,623
3,228
___________
___________
__________
8,344
6,351
8,398
___________
___________
__________
Total assets
9,516
7,807
9,687
___________
___________
__________
Equity
Share capital
505
505
505
Share premium
673
673
673
Equity reserve
66
66
66
Merger reserve
1,508
1,508
1,508
Accumulated deficit
(5,076)
(5,905)
(5,420)
___________
___________
__________
Total equity
(2,324)
(3,153)
(2,668)
___________
___________
__________
Non-current liabilities
Convertible loan notes
4,790
4,708
4,747
Lease liabilities
1,301
1,531
1,404
Deferred revenue
311
221
166
___________
___________
__________
6,402
6,460
6,317
___________
___________
__________
Current liabilities
Lease liabilities
284
242
253
Trade and other payables
1,955
1,406
1,899
Deferred revenue
3,199
2,852
3,886
___________
___________
__________
5,438
4,500
6,038
___________
___________
__________
Total liabilities
11,840
10,960
12,355
___________
___________
__________
Total equity and liabilities
9,516
7,807
9,687
___________
___________
__________
The Consolidated Balance Sheets for the periods ending 30 September 2018 and 31 March 2019 have been restated to reflect the impact of IFRS 16 Leases (see Notes 1 and 6).
Consolidated Statement of Changes in Equity
Share capital
Share premium
Equity reserve
Merger reserve
Accumulated deficit
Total
£'000
£'000
£'000
£'000
£'000
£'000
At 1 April 2019 (Original)
505
673
66
1,508
(4,898)
(2,146)
Change in accounting policy
-
-
-
-
(522)
(522)
______
_______
_______
_______
__________
_______
At 1 April 2019 (Restated)
505
673
66
1,508
(5,420)
(2,668)
Proceeds from recycling of own shares
-
-
-
-
17
17
Employee share option plan charge
-
-
-
-
54
54
Employee share incentive plan charge
-
-
-
-
89
89
Profit for the period and total comprehensive income
-
-
-
-
184
184
________
________
________
________
______________
_______
At 30 September 2019
505
673
66
1,508
(5,076)
(2,324)
At 1 April 2018 (Original)
505
673
66
1,508
(5,719)
(2,967)
Change in accounting policy
-
-
-
-
(443)
(443)
______
_______
_______
_______
__________
_______
At 1 April 2018 (Restated)
505
673
66
1,508
(6,162)
(3,410)
Proceeds from recycling of own shares
-
-
-
-
12
12
Employee share option plan credit
-
-
-
-
(1)
(1)
Employee share incentive plan charge
-
-
-
-
157
157
Profit for the period and total comprehensive income (Restated)
-
-
-
-
89
89
________
________
________
________
___________
_______
At 30 September 2018 (Restated)
505
673
66
1,508
(5,905)
(3,153)
At 1 April 2018 (Original)
505
673
66
1,508
(5,719)
(2,967)
Change in accounting policy
-
-
-
-
(443)
(443)
______
_______
_______
_______
__________
_______
At 1 April 2018 (Restated)
505
673
66
1,508
(6,162)
(3,410)
Proceeds from recycling of own shares
-
-
-
-
27
27
Employee share option plan charge
-
-
-
-
17
17
Employee share incentive plan charge
-
-
-
-
249
249
Profit for the period and total comprehensive income (Restated)
-
-
-
-
449
449
________
________
________
________
__________
_______
At 31 March 2019 (Restated)
505
673
66
1,508
(5,420)
(2,668)
The Consolidated Statements of Changes in Equity for the periods ending 30 September 2018 and 31 March 2019 have been restated to reflect the impact of IFRS 16 Leases (see Notes 1 and 6).
Consolidated Cash Flow Statement
6 months ended 30 September 2019
6 months ended 30 September 2018
Year ended
31 March 2019
Restated
Restated
£'000
£'000
£'000
Cash flows from operating activities
Operating profit/(loss)
25
(609)
59
Depreciation
157
177
344
Profit on disposal of property, plant and equipment
(50)
-
-
Employee share option plan charge/(credit)
54
(1)
17
Employee share incentive plan charge
89
157
249
Employee unit incentive plan charge
14
6
5
Employee unit incentive plan payment
-
-
(7)
Decrease/(increase) in trade and other receivables
2,009
2,312
(131)
Increase/(decrease) in trade and other payables
41
(460)
44
(Decrease)/increase in deferred revenue
(542)
(916)
63
Increase in lease liabilities
44
73
63
____________
____________
__________
Cash generated from operations
1,841
739
706
Finance income
7
3
9
Finance costs on convertible loan notes
(199)
(199)
(400)
Finance costs on leases
(54)
(61)
(122)
Taxation
(13)
993
979
____________
____________
__________
Net cash generated from operating activities
1,582
1,475
1,172
____________
____________
__________
Investing activities
Proceeds on disposal of property, plant and equipment
422
-
-
Purchases of property, plant and equipment
(39)
(75)
(75)
____________
____________
__________
Cash generated from/(used in) investing activities
383
(75)
(75)
____________
____________
__________
Financing activities
Proceeds from recycling of own shares
17
12
27
Principal elements of lease payments
(116)
(106)
(212)
____________
____________
__________
Cash used in financing activities
(99)
(94)
(185)
____________
____________
__________
Net increase in cash and cash equivalents
1,866
1,306
912
Cash and cash equivalents at the beginning of the period
3,228
2,272
2,272
Exchange gains on cash and cash equivalents
62
45
44
____________
____________
__________
Cash and cash equivalents at the end of the period
5,156
3,623
3,228
____________
____________
__________
The Consolidated Cash Flow Statements for the periods ending 30 September 2018 and 31 March 2019 have been restated to reflect the impact of IFRS 16 Leases (see Notes 1 and 6).
Notes to the Consolidated Accounts
For the period ended 30 September 2019
1 Preparation of the interim financial statements
These interim financial statements have been prepared under IFRS as adopted by the European Union and on the basis of the accounting policies set out in the Group's Annual Report for the year ended 31 March 2019.
The Group applies, for the first time, IFRS 16 Leases and the nature and effect of this change is disclosed below. Several other amendments and interpretations are effective for reporting periods beginning on or after 1 January 2019. These have been applied but do not have an impact on the interim consolidated financial statements of the Group. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not effective.
These interim financial statements have not been audited and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2018 have been delivered to the Registrar of Companies. The Auditors' Report on those accounts was unqualified and did not contain any statement under Section 498 (2) or (3) of the Companies Act 2006.
The Interim Report will be mailed to shareholders within the next few weeks and copies will be available on the website (www.intercede.com) and at the registered office: Intercede Group plc, Lutterworth Hall, St Mary's Road, Lutterworth, Leicestershire, LE17 4PS.
Revised accounting policy for IFRS 16 (replacing 'Leased assets' policy)
At the inception of a contract the Group assesses whether the contract is, or contains, a lease. A lease is present where the contract conveys, over a period of time, the right to control the use of an identified asset in exchange for consideration. Where a lease is identified the Group recognises a right of use asset and a corresponding lease liability, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets.
The lease liability is initially measured at the present value of the future lease payments, which are discounted at the Group's incremental borrowing rate (8%). The lease liability is re-measured for modifications to lease payments due to changes in an index or rate or where the lease contract is modified and is not accounted for as a separate lease. When the lease liability is re-measured an equivalent adjustment is made to the right of use asset. Where the lease liability is denominated in a foreign currency it is retranslated at the Balance Sheet date and gains or losses are included in the Statement of Comprehensive Income.
A right of use asset comprises the initial measurement of the corresponding lease liability and is subsequently measured at cost less accumulated depreciation. Right of use assets are depreciated over the lease term.
2 Revenue
All of the Group's revenue, operating profits/(losses) and net liabilities originate from operations in the UK. The Directors consider that the activities of the Group constitute a single business segment.
The split of revenue by geographical destination of the end customer can be analysed as follows:
6 months ended
30 September 2019
6 months ended
30 September 2018
Year ended 31 March 2019
£'000
£'000
£'000
UK
39
201
331
Rest of Europe
578
827
1,738
North America
3,041
2,814
6,981
Rest of World
706
332
1,058
___________
___________
__________
4,364
4,174
10,108
___________
____________
__________
3 Taxation
Taxation represents the net effect of amounts receivable from HMRC in respect of R&D claims and US corporation tax payable.
4 Earnings per share
The calculations of earnings per ordinary share are based on the profit for the period and the weighted average number of ordinary shares in issue during each period.
6 months ended
30 September 2019
6 months ended
30 September 2018
Year ended 31 March 2019
Restated
Restated
£'000
£'000
£'000
Profit for the period
184
89
449
___________
___________
__________
Number
Number
Number
Weighted average number of shares
- basic
50,482,281
50,482,281
50,482,281
- diluted
60,552,436
58,562,299
59,214,607
___________
___________
__________
Pence
Pence
Pence
Earnings per share
- basic
0.4p
0.2p
0.9p
- diluted
0.3p
0.2p
0.8p
___________
___________
__________
4 Earnings per share (continued)
The weighted average number of shares used in the calculation of basic and diluted earnings per share for each period were calculated as follows:
6 months ended
30 September 2019
6 months ended
30 September 2018
Year ended 31 March 2019
Number
Number
Number
Issued ordinary shares at start of period
50,523,926
50,523,926
50,523,926
Effect of treasury shares
(41,645)
(41,645)
(41,645)
___________
___________
__________
Weighted average number of shares
- basic
50,482,281
50,482,281
50,482,281
___________
___________
__________
Add back effect of treasury shares
41,645
41,645
41,645
Effect of share options in issue
2,755,123
764,986
1,417,294
Effect of convertible loan notes in issue
7,273,387
7,273,387
7,273,387
___________
___________
__________
Weighted average number of shares
- diluted
60,552,436
58,562,299
59,214,607
___________
___________
__________
5 Dividend
The Directors do not recommend the payment of a dividend.
6 IFRS 16 transition note
The Group has applied IFRS 16 retrospectively and the tables below show the adjustments ("Adj") recognised for each line item at 30 September 2019, 30 September 2018 and 31 March 2019. Line items that were not affected by the changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided.
Consolidated Statement of Comprehensive Income (extract)
6 months ended 30 September 2019
6 months ended 30 September 2018
Year ended 31 March 2019
Original
Adj
Restated
Original
Adj
Restated
Original
Adj
Restated
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Operating expenses
(4,341)
12
(4,329)
(4,748)
(20)
(4,768)
(10,068)
43
(10,025)
__________
__________
__________
__________
__________
__________
__________
__________
__________
Operating profit/(loss)
13
12
25
(589)
(20)
(609)
16
43
59
Finance costs
(243)
(54)
(297)
(239)
(61)
(300)
(478)
(122)
(600)
__________
__________
__________
__________
__________
__________
_________
__________
__________
Loss before tax
(221)
(42)
(263)
(823)
(81)
(904)
(451)
(79)
(530)
__________
__________
__________
__________
__________
__________
__________
__________
__________
6 IFRS 16 transition note (continued)
Consolidated Balance Sheet (extract)
As at 30 September 2019
As at 30 September 2018
As at 31 March 2019
Original
Adj
Restated
Original
Adj
Restated
Original
Adj
Restated
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Non-current assets
Right of use assets
-
1,021
1,021
-
1,249
1,249
-
1,135
1,135
Total assets
8,495
1,021
9,516
6,558
1,249
7,807
8,552
1,135
9,687
__________
__________
__________
__________
__________
__________
__________
__________
__________
Equity
Accumulated deficit
(4,512)
(564)
(5,076)
(5,381)
(524)
(5,905)
(4,898)
(522)
(5,420)
__________
__________
__________
__________
__________
__________
__________
__________
__________
Total equity
(1,760)
(564)
(2,324)
(2,629)
(524)
(3,153)
(2,146)
(522)
(2,668)
__________
__________
__________
__________
__________
__________
__________
__________
__________
Non-current liabilities
Lease liabilities
-
1,301
1,301
-
1,531
1,531
-
1,404
1,404
Current liabilities
Lease liabilities
-
284
284
-
242
242
-
253
253
__________
__________
__________
_________
__________
__________
__________
__________
__________
Total liabilities
10,255
1,585
11,840
9,187
1,773
10,960
10,698
1,657
12,355
__________
__________
__________
__________
__________
__________
__________
__________
__________
Total equity and liabilities
8,495
1,021
9,516
6,558
1,249
7,807
8,552
1,135
9687
__________
__________
__________
__________
__________
__________
__________
__________
__________
Consolidated Cash Flow Statement (extract)
6 months ended 30 September 2019
6 months ended 30 September 2018
Year ended 31 March 2019
Original
Adj
Restated
Original
Adj
Restated
Original
Adj
Restated
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Operating profit/(loss)
13
12
25
(589)
(20)
(609)
16
43
59
Depreciation
43
114
157
63
114
177
116
228
344
Increase in lease liabilities
-
44
44
-
73
73
-
63
63
__________
__________
__________
__________
__________
__________
__________
__________
__________
Cash generated from operations
1,671
170
1,841
572
167
739
372
334
706
Finance costs on leases
-
(54)
(54)
-
(61)
(61)
-
(122)
(122)
__________
__________
__________
__________
__________
__________
__________
__________
__________
Net cash generated from operating activities
1,466
116
1,582
1,369
106
1,475
960
212
1,172
__________
__________
__________
__________
__________
__________
__________
__________
__________
Principal elements of lease payments
-
(116)
(116)
-
(106)
(106)
-
(212)
(212)
__________
__________
__________
__________
__________
__________
__________
__________
__________
Cash generated from/(used in) financing activities
17
(116)
(99)
12
(106)
(94)
27
(212)
(185)
Net increase in cash and cash equivalents
1,866
-
1,866
1,306
-
1,306
912
-
912
__________
__________
__________
__________
__________
__________
__________
__________
__________
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